Rural utility gives rate alert San Carlos Project warns of 300% rise in power bills

Mark Henle/The Arizona Republic Jim Wheeler of Idaho, who has wintered at Caliente Casa de Sol for 19 years, says he may not be back next year. By Heather Romero The Arizona Republic Jan. 26, 2001

A $300 monthly electric bill would send Florence retiree Warrene Graves into financial crisis.

Yet that is just what Graves and many of San Carlos Irrigation Project's 13,300 customers could face next month when electric bills are projected to go up as much as 300 percent.

"That would just be outrageous," said Graves, a 62-year-old retired nurse who lives in Florence six months of the year. "All they'll get is dust from everyone leaving."

San Carlos officials attribute the increase to California's energy crisis and the resulting skyrocketed cost of buying energy on the open market.

"We have no alternative. Those costs have to be passed on to the customers," said Wayne Nordwall, director of the Bureau of Indian Affair's Western region and the overseer of the federal project.

The San Carlos project supplies electricity to 3,000 square miles of rural Arizona, from the Gila River Indian Community west to Oracle and south to portions of Florence, Coolidge and Casa Grande. Most of its customers live in low-income areas.

Nordwall expected to meet today with local politicians to try to come up with a last-minute alternative to the steep increases.

"Obviously, the customers just can't pay that," he said. "A lot of people can't be faced with the option of paying the electric bill or buying groceries or medicine."

The project was federally created in 1924 to supply water and power to area farmers and is not subject to state regulation or the same fixed rates as the state's largest suppliers.

Nordwall said the cost of a megawatt of electricity, once running $20 to $30, has now jumped to $250 to $300.

On Thursday morning, about 500 Florence retirees packed a meeting to discuss the hikes at Caliente Casa Del Sol Mobile Home Park, located in an area where 4,000 customers would be affected.

Park Manager Arnie Raasch urged them to call and write their congressmen. A representative from U.S. Rep. J.D. Hayworth's office also attended, promising to return Monday with more information.

"They need to be aware of the fact that they're putting a lot of senior citizens, who are on fixed incomes, in a pretty drastic situation," Raasch said.

Nordwall said the problem stems from the fact that the project no longer generates its own power and has to buy it on the open market. Rates for the state's major power-producing companies, such as Arizona Public Service Co. and the Salt River Project, are set until at least 2004.

When the project was first created, turbines roared at San Carlos Lake. But because power was so cheap, Congress did not authorize their replacement when they quit working more than a decade ago, he said.

"We were very concerned that something like this was going to happen," said Francie Noyes, a spokeswoman for Gov. Jane Hull. "It's the smaller companies who have to buy their power that are being hurt."

Noyes said Hull planned to meet with White House staff today on the energy crisis.

Still, "I don't 'know if there's anything we can fix," she said. "We don't have any authority in this particular situation."

Project customers near enough to other utility companies could also switch to other suppliers, which would cause more of a burden on remaining customers or even force the project to cease operations.

"This is a national problem, and it's spreading all through the West," Nordwall said.

"In the absence of something miraculous, there will be a dramatic increase."

Reach the reporter at heather.romero@arizonarepublic.com or (602) 444-7981.

http://www.arizonarepublic.com/arizona/articles/0126rates26.html

-- Martin Thompson (mthom1927@aol.com), January 26, 2001